1. GMPs: a route to reconciliation
Launch of PASA guidance
19 January 2016

2. Agenda 1 Introduction and welcome 2
The big picture: from reconciliation to rectification 3
Introducing the guidance 4
Panel session and Q&A

3. The big picture: from reconciliation to rectification1.
Getting started 2.
Reconciling data 3.
Correcting benefits
Why do schemes need to reconcile GMPs at all?
What does GMP reconciliation look like in practice?
What do schemes do about any errors identified?

4. Ten reasons to undertake GMP reconciliation
Paying the right benefits 1
Record- keeping 2
Data protection 3
Scheme funding 4
Future derisking 5
Equalisation/ winding-up 6
Reduce queries/ complaints 7
Inaccurate HMRC data 8
Impact of failure to act 9
Fixed deadline 10

5. Understanding the scope of the problem?
1. Which members are we talking about?
2. How big an issue is reconciliation/ rectification going to be?
Setting tolerance levels
Members in scope
Cost/benefit analysis

6. Identifying members in scope for reconciliation
Scheme data
HMRC data
Missing members:
NI mismatch
Wrong SCON
Transfers in
Unexpected members:
Transfers out
Trivial commutation
Refund/CEP paid
Lost from admin system?
Matching members

7. Matching members does not mean matching data
Typical results for agreed memberships
10% show a discrepancy greater than £2 per week
20% match to within 6p-£2 per week
50% match exactly
20% match to within 1-5p per week

8. Reconciling member data (PASA guidance note 2)
Why not just accept HMRC data?
Identifying reasons for data errors
Typical causes of data discrepancies
Post 97
Revaluation rate
Transfers
Earnings histories
Service dates
Multiple service periods
Your scheme history
Access to data and records
The benefits of sampling

9. The role of tolerances (PASA guidance note 3)
Why £2 per week isn’t a default standard
How do schemes work with tolerances in practice?
Impact of different tolerances
What do we mean by tolerances?
Rounding
Scheme
Corrective
Why tolerances must be scheme-specific 5 1 4 2 3

10. What to expect from your administrator1 2 3 4 5
Subject matter expertise
Planning and reporting
Support with:
costs and scope for each stage
setting appropriate tolerance levels
decision making
Reconciliation processes as agreed
Closure report:
comparison of position pre– and post– reconciliation
outstanding queries
next steps

11. The final stage: dealing with discrepancies
Data reconciliation is not the end of the story
Underpayments and overpayments identified
Paying correct benefits to all members vs
Safeguarding assets for benefit of all members
Next steps:
legal and practical considerations
Can tolerances be applied to rectification strategies?
Underpayments/overpayments
Deferred/pensioner members
Proportionality and other considerations
Can the scheme adopt a pragmatic approach?
Authorised payments
Breach reporting
Risk of complaints/trustee protection
Legal implications of action

12. Future guidance: legal considerations on rectification
Underpayments – relatively straightforward
Overpayments:
Amend rules, or augment individual member benefits?
Write off?
Seek recovery?
If augmenting, impose special terms?
Reduce to correct level
Reduce to correct level; offset past overpayments?
Past payments
Future payments
Practical considerations:
mitigating the risk of complaints
member defences
difficult cases

13. Questions? Geraldine Brassett PASA Board Member
Helen Powell PSL Counsel, Allen & Overy LLP
Contact:
Tel: + 44 (0) Mob: +44 (0)
Geraldine Brassett PASA Board Member
Contact:
Mob: +44 (0)
These are presentation slides only. The information within these slides does not constitute definitive advice and should not be used as the basis for giving definitive advice without checking the primary sources.
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